03 February 2018

Informal economy, long neglected, shows signs of turnaround

Street vendors in Lae (Michael & Lori Johnson)

BUSA JEREMIAH WENOGO

PORT MORESBY - Dealing with the informal economy in its entirety – all those street vendors, hawkers, kerbside buai sellers,small time artisans and the rest - is a difficult proposition for any government.

Just ask the National Capital District Commission how daunting a task it is just to address the problems related to sale and consumption of buai (betel nut) in Port Moresby.

Even the national government has found it difficult to develop suitable laws and policies for the informal sector, particularly in terms of encouraging adequate investment to support its growth.

The Constitutional Law Reform Commission has concluded that lack of government ownership is a major impediment. The Community Development Department said it was “not clear” on what role it should to play and also stated that, with limited resources, it was too overwhelmed to coordinate government efforts to spur informal economy growth.

There was an obvious need for a more focused role to ensuring progress is made in this area – and this is occurring.

It is termed the ‘Informal Economy Voice Strategy’ and is designed to organise informal economy participants into a registered associations as well as refining the role of the Department in implementing the National Informal Economy Policy.

The strategy stipulates that the role of the Department is to coordinate, facilitate and network with informal economy participants through their associations to design programs to assist with their development.

The Department will work with key government departments and agencies, private sector firms and development partners to assist in program delivery. It will take the lead in setting up associations, building leadership capacity, attracting membership and monitoring progress.

Once established, the associations will act as a portal allowing government access into the informal economy. They will give the sector a face and a voice, replacing the vast, disorganised and undetectable activities of the present.

It would be in the best interests of PNG’s large informal economy that the government takes a broader outlook, we have to be realistic of how government support (in terms of funding and training) can be delivered to assist the sector to grow.

At present this support is not coordinated by government and is delivered by a myriad of partners on an ad-hoc basis.

As a result the government is unable to report progress against its goals. Such progressive report and monitoring will be crucial when the National Informal Economy Policy is reviewed.

An important step is the creation of the Informal Economy Section within the Department of Community Development and Religion.

The section is headed by an Assistant Secretary who has a team of about five officers dealing with key initiatives such as financial inclusion, a national audit of informal economic activities, the Informal Sector Development & Control Act and stakeholder engagement.

The section will take carriage of the strategy once it is endorsed by the government.

The original intention was for the law to create provisions where representatives from peak informal economy associations could become members of existing committees at the three levels of government. In this way, it is hoped the informal economy can feature prominently in the policy and planning process.

This is a long term goal but one that can be achieved if the government sustains its focus, effort and drive. The composition of the committees is explicitly stated so there is little room to appoint political cronies.

Having the Minister involved may be a blessing as it will bring the informal economy agenda into the government spotlight, something that it really needs.

While the strategy advocates the formation of informal economy associations and the need for government to take ownership; it also realises that success depends on the ability of these associations to represent the interests of members without bias or favour.

Thus the goal is to ensure they are strong enough to be able to stand up and raise concerns affecting their membership.

Developing an appropriate structure for PNG’s informal economy is slowly heading in the right direction.